Worried about gst rates know what gets cheaper and costlier from july 1

Worried about GST rates?

Know what gets cheaper and costlier from July 1

The Goods and Services Tax (GST) rehime is set to be rolled out from July 1, more than 11 years after a formal process to introduce it began.

The GST Council on Thursday fixed rates for 1,211 items. In the second half of the Council meet, on Friday, rates of services and products like beedi, cigarettes, tobacco, footwear, gold, textile, handloom, handicraft, agricultural equipment and biscuits, will be discussed.

It appears from the first set of announced rates that consumers can rest assured most of the items will become cheaper (for now) as the new rates will be lower than the current effective levies.

Mobiles phones, however, might get costlier, with the government imposing a 12% GST, taking away the benefit under duty differential that was being offered to local manufacturers. So, under the new GST rate, while imported phones will become cheaper, most locally manufactured ones will get costlier.

Foodgrains will cost less as the GST Council decided to exempt the daily-use commodities from the levy.

GST promises to stitch together a common national market by replacing a string of central and local levies such as excise, value added tax, octroi, service tax.

What will get cheaper?

"Categorisation of several consumer products like soaps, toothpaste and hair oil under 18 per cent is good news and should see price drop for consumers," said Pratik Jain, leader, indirect tax, PwC to Economics Times. "Similarly, several food items such as edible oil, tea, coffee, sugar, etc, have been kept at 5 per cent , with exemption for milk and foodgrain, which would also cheer industry."

Branded goods: Tax rates on branded goods have been slashed to 18 per cent.

Currently, the effective tax rate for the three items is pegged at 23-24 percent.

Hotels: Staying at hotels post the implementation of GST will become cheaper as they are currently taxed at 22% and a posed to be under the 18% tax bracket.

Restaurants which will come down to 18% from 22% tax slab.

Foodgrains will cost less Processed food items that draw tax rates of 15% will be taxed at 5% under GST. Under services, entertainment services will be brought down from 22% to 18% under GST. Soap which are currently taxed at 28% will be taxed at 18% under GST. Similarly toothpaste will come down from 22-24% current tax rate to 18%.

Personal hair products - hair oil will become cheaper as it will drop 10% from 28% current tax rate to 18% under GST. Entry level cars, two-wheelers, paint, cement, electrical items, consumer durables are expected to get cheaper.

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ARTICLE SOURCE – BUSINESS STANDARD